An Un-Stately Approach - States Lying About Where MSA Funds Go

An Un-Stately Approach - July/August 2004

Who are the states trying to kid? Their grand statements on how they will allocate their MSA and tobacco excise tax monies are nothing but grand lies.

Remember when the MSA was signed and the states held press conferences proclaiming how they would spend their funds (up to $246 billion over a 25-year period)? They prioritized smoking education, cessation, and research; they proudly rattled off protecting youth and improving public health. By Renee M. Covino

Then in subsequent years--including this one--bills for raising tobacco excise taxes were proposed. Each year, state legislatures reiterated their grand proposals to fund tobacco control and health-related programs. They talked convincingly of using the money for public health and protecting our kids.

And now that more than five years have passed since all this began, there's one thing that still rings true--the states sure know how to talk a good game. Their ploy has been likened to the classic "bait and switch" scheme where advertisers lure people in with one great deal--only to sell them something else--typically half as good and twice as expensive. In this instance, smokers are being reamed with taxes and all constituencies are being taken for a ride--sometimes on new golf carts that were purchased with the MSA money (such as in the state of New York, see "Found" chart, page 60).

For a while now, we've seen it coming. Two years ago, the National Conference of State Legislatures (NCSL) analyzed state plans for spending MSA funds during fiscal years 2000 through 2003. Of the total $33.1 billion in MSA funds that states were to receive during this period, the NCSL found that more than half of the money was earmarked for projects totally unrelated to smoking.

More recently, on the MSA's fifth anniversary last November, a coalition of public health organizers, including the Campaign for Tobacco-Free Kids, released a report entitled "A Broken Promise to Our Children: The 1998 State Tobacco Settlement Five Years Later." The study found that only four states--Maine, Delaware, Mississippi, and Arkansas--currently fund tobacco prevention and cessation programs at minimum levels recommended by the U.S. Centers for Disease Control and Prevention (CDC), which usually amount to only about 20 to 25 percent of a state's annual settlement payments. "Thirty-eight states and the District of Columbia fund tobacco prevention programs at less than half the CDC's minimum level or provide no state funding at all," according to the report.

The summary highlighted that "five years after the November 1998 state tobacco settlement, we find that most states have failed to keep their promise," and that "the states lack credible excuses for their failure."

And just this March, the United States General Accounting Office (GAO) released a report after surveying the 46 states that signed the MSA (Mississippi, Florida, Texas, and Minnesota negotiated separate settlements with the tobacco industry before the MSA was signed in November, 1998). The GAO found that the states used the largest portions of the fiscal year 2003 payments to address budget shortfalls. What's worse, the portion allocated to meet budget shortfalls